Labor pledges to overhaul credit reporting laws to improve SME access to bank loans

The Labor party is ramping up its pitch to small business owners ahead of a likely double dissolution election by pledging to overhaul credit reporting laws if it wins enough seats to form government.

Over the weekend, shadow minister for small business Michelle Rowland unveiled a plan to require banks to share positive credit information about potential clients and not just red flags.

Under the current system, financial systems can voluntarily share positive credit histories between themselves.

However, Labor wants to make this mandatory in a bid to boost competition among banks and increase the number of loans given to small business owners who want to grow their businesses.

Access to finance is a major hurdle for small businesses in Australia, with many business owners forced to use credit cards or even borrow money from family members.

“Access to finance is a huge issue, but we said ‘what’s a practical thing we can do to deliver a good result for small business?’” Rowland told SmartCompany.

“We don’t want to pick winners, but we do want to create a regulatory framework that is more robust.”

Under the previous Rudd and Gillard governments, Australians saw seven small business ministers come and go in six years.

Rowland says Labor is now working hard in opposition to roll out practical policies that will benefit the small business sector.

“It’s important for Labor to keep rolling out really responsible and practical policies in this area,” Rowland says.

“We’re progressively going to be rolling out policies and you’ll see that same theme – it’s not stale talking points, but very responsive to actual needs being raised.”